Why Did Ballmer Throw Nokia Under the Bus? Windows Phone & Lumia Insights from stats

[Pedro]

Why Did Ballmer Throw Nokia Now Under the Bus? Lets Dig Windows Phone & Lumia Insights from Kantar Stats

Kantar Worldpanel releases infrequent updates of its data. We have just seen June 2012 market share data for 7 countries this time, by Kantar, reported at MyNokia blog. The June numbers are compared to a year ago, June 2011. The nice thing about Kantar, is that it is one of very rare houses that reports national market shares of new sales - and splits the Microsoft data apart for Windows Mobile and Windows Phone. So we get some very useful data. Lets explore what facts we find, to try to understand why so suddenly last few weeks, Steve Ballmer CEO of Microsoft has clearly thrown his old buddy Stephen Elop and Nokia's 'strategic partner' Lumia Windows Phone smartphones under the bus? There is an intriguing story in the numbers.

http://communities-dominate.blogs.co...ntar-stat.html

About the author, it seems Tomi T Ahonen is a former Nokia executive, and a Finn.

While i initially found the tone on the blog a bit of a rant, i also quickly found that more importantly, he seems to know far more about Nokia than the current CEO, and backs his arguments with numbers and facts.

I never did understand how one could destroy Nokia's resources like he has. It is mind boggling.
Teams of engineers building platforms that were far more successful than Windows phone suddenly get replaced by the same. Symbian, aka one of the cash cows, thrown under the bus.

The blog is an eye opener, backing up our gut feelings with facts, and while his posts are huge, i would suggest them to anyone interested in the mobile market.
I didnt know about the "Burning Platforms" memo until this blog appeared on my radar. Amazing.

[gerardwil]

Nice/interesting/shocking read, thanks Pedro for the link.

[Noob]

I'll never get tired of saying it, Nokia did not put enough resources into Symbian, instead they got stuck for YEARS with minor updates for it, then when the ship started to sink, they wanted to be exclusive with an OS that NEVER had a chance in the smartphone market, not even vs their already outdated Symbian.

Their first mistake was abandoning Symbian, second mistake not adopting Android (It never hurts to support multiple platforms "Diversification") and their third catastrophic mistake adopting the worst OS they could possibly choose.
I don't know what's going through all these executives, supposedly they are there for a reason but it doesn't looks like they have a brain at all, what they were expecting from Microsoft OS, magic?

And at the end Nokia will have the worst part, Microsoft can still survive if W8 is a major fail but Nokia will have a hard time getting through this.

Nokia will pick up again. The reason their shares were dropping is mainly due to Symbian dying out for consumers. Soon they will focus on Windows Phone 8 and once implemented, things will start looking good for them again.

[Pedro]

The reason Symbian died this fast seems to be a direct consequence of the CEO. The Osborne effect, which Ahonen talks about a lot.

The Osborne effect is a term referring to the unintended consequence of the announcement of a future product ahead of its availability and its impact upon the sales of the current product.

https://en.wikipedia.org/wiki/Osborne_effect

He single handedly destroyed Symbian, a money maker, and bet all on this single phone which was not yet ready at the time. The whole thing is bizarre and dumb. Really dumb.

Read this June post, from 2011!
Deluded? Seriously? Can I really honestly claim that Nokia's CEO Stephen Elop is deluded? Unfortunately.. yes.

Guys, this is a bit different. First, lets be clear. Delusional. I am serious. Delusion as defined at Wikipedia is “a belief that is mistaken or not substantiated, that is held with vehemence.” Wikipedia further explains: “(delusion) is pathological and is held despite evidence to the contrary.” Wikipedia even explains that delusion is different from perception, so a delusional person has to take an active effort to suspend reality and believe in something contrary to the facts (where perception allows for example memory errors and to be unwittingly mistaken, etc).

And for my regular readers and random visitors. This is a monster-long blog. Its 13,000 words in length, so it is longer than a typical chapter in a book. It will take you nearly an hour to read through, and it is stuffed with facts and data, so it will take effort to read and process. But the point is very important, if I am suggesting the CEO of Nokia is honestly, seriously speaking ‘delusional’ as per the above definition. Go get yourself a cup of coffee before you read this, and please give your feedback.

This is part 3 of my trilogy on Nokia profit warning. Part 1 examined the impact of the profit warning to Nokia 2011 sales and profits. Part 2 pondered the bizarre timing of the announcement of the Microsoft partnership, while Nokia didn't have phones to offer. And now this is Part 3, the climax. Is Elop Delusional.

Nokia needs to have a future, without Elop and Balmer, maybe with a Windows phone or two (if it actually turns a profit that is), but getting back to Meego/Meltemi or whatever Linux solution they can work with, and Qt. Assess if Symbian is salvageable with the global carriers. Drop this US market only focus.

This is where their real investment is, their human resources and assets. They need a CEO that can work, and deliver, and fix their product management.
Not a back room cigar smoking deals type. That seems evident.

A year ago it was clearly doable, now they probably need to focus alot on delivering a few good phones.
What a mess.

[Pedro]

So Nokia Q2 results are out and the earnings season gets into gear. We heard the carnage. Looking at it from the Digital Jamboree angle (smartphones market share bloodbath, year 3) we get the following findings

Nokia unit sales of all smartphones fell from 11.9 million in Q1 to 10.2 million now in Q2. The decline is 14%. This while the industry is expected to grow this quarter. My preliminary market share for all Nokia smartphones is 6% now, down from 8% just three months ago.

To understand the context, when Elop took over, in the first full quarter he was in charge, Nokia's smartphone unit sold 28 million smartphones and had 29% market share. Nokia was twice as big as Apple and three times bigger than Samsung. Nokia's smarpthone unit was growing sales strongly - the year 2010 Nokia had seen bigger growth in units sold of its own smarpthones than Apple had with the iPhone! And Nokia's smarpthone unit was profitable, and again, the first quarter Elop was in charge, Nokia's smartphone unit generated a Nokia-record jump in its profits.

Now the unit sells 10.2 million smarpthones, the market share is down to 6%. While the industry grows strongly, Nokia's smartphone sales shrink. Nokia is now one third the size of Apple and one fifth the size of Samsung in smartphones. Nokia's smarpthone unit just generated the biggest loss Nokia has ever seen, and the guidance for Q3 is that the handset unit will have as bad a quarter if not worse!!!

http://communities-dominate.blogs.co...-more-bad.html

[Noob]

Not a bright future for Nokia, at least not in the next year or so unless they make REALLY drastic changes.

[NGRhodes]

Originally Posted by guest

Nokia will pick up again. The reason their shares were dropping is mainly due to Symbian dying out for consumers. Soon they will focus on Windows Phone 8 and once implemented, things will start looking good for them again.

But what do we know about Windows Phone 8 that could improve the situation for Nokia ?

[Pedro]

Digging Deeper into Nokia Q2 Results - and exactly how many 'awesome' sales was AT&T and China... (Updated)

Lets dig into those Nokia Q2 numbers and the statements from the Conference Call some more. Yesterday I published the top line market data. Now lets look deeper. We heard a lot of marketing spin in the past months during the massive Lumia launches. We heard that UK consumers have grown tired of iPhones, that on AT&T the phone was among its best sellers and in China the Windows Phones were outselling the iPhone. Yeah. And monkeys might fly out of my butt, as Madonna said on Wayne's World.

Nokia didn't talk about their ASP, but its easy to calculate when we know Lumia ASP. 4 million Lumia units sold at average sales price of 186 gives us Lumia revenues of 744 million Euros. That leaves us 797 million Euros earned out of the sale of 6.2 million smartphones running Symbian or MeeGo, and that gives their ASP of 129 Euros. And guess what. That ASP is up - yes up - by 1% from Q1. Who says nobody loves Nokia's Symbian and MeeGo then? While Lumia gets Nokia's biggest marketing launch blitz ever, and added to that massive spend, carriers like AT&T have had their biggest marketing spend ever, and add to that Microsoft throwing literally hundreds of millions of dollars more at Lumia such as giving away free Xbox 360 gaming consoles to buyers of top end Lumias - what do we get? The Lumia series ASP falls 15% in 3 months. And in its shadow, the 'burning platforms' utterly Osborned and Ratnered, indeed Elop'ped and unloved Symbian and MeeGo - see their average sales prices not just hold steady, but grow a percent in the same period. What IS wrong with this picture?

more...

[Pedro]

Nokia Reportedly Selling Off Qt

While word crept out last night that Nokia would be closing down their Brisbane office where several of the Qt components are maintained and developed, it looks like the Qt infliction is going much further. Nokia's now reportedly trying to offload Qt entirely.

To not much surprise, Nokia doesn't want to do much these days with the Norwegian tool-kit now that they're on the Windows Phone bandwagon and letting Microsoft bang their drum. Nokia already parted ways with Maemo and MeeGo (and Symbian) and then last week they put a bullet in Meltemi, their last Linux effort. Now the failing phone company no longer has any use for Qt; Nokia bought out Trolltech in early 2008.

http://www.phoronix.com/scan.php?pag...tem&px=MTE1MTc

Nokia's Actions Already Harm Qt 5.0 Release

With Nokia shutting down their Qt Australia office -- and looking to sell off Qt -- this has already directly harmed the forthcoming Qt 5.0 tool-kit release.

Aside from Lars Knoll, the Qt Chief Architect at Nokia, expressing his disappointment over Nokia's decision to eliminate their Brisbane team, he shared more information in another email today.

As "one of the first consequences of the situation in Brisbane", he's working to come up with a list of the essential modules for Qt 5.0. Due to the Brisbane team having been responsible for several key Qt components and the developers' fates post-Nokia not being known, Lars Knoll is planning to move Qt3D and QtLocation from being essential modules to just being add-ons.

http://www.phoronix.com/scan.php?pag...tem&px=MTE1Mjg

Qt's Lars Knoll: "It's Really Sad To See This Happen"

Lars Knoll, the current Qt Chief Architect at Nokia and responsible for leading the Qt 5.0 development, has commented on the shutting down of Nokia's Qt Australia office.
(...)
There's been a lot of negative words towards Nokia -- besides everything else in past months after falling jumping in bed with Microsoft -- with this move to effectively abandon Qt and the fate being uncertain. One can only hope many of these important Qt developers will find employment elsewhere and can continue contributing to upstream Qt.

http://www.phoronix.com/scan.php?pag...tem&px=MTE1MjU

[Pedro]

Dispatches From The Battlefield - Some Digital Jamboree Notes from various Smartphone Makers

And the Nokianews is of course, as expected, all bad news - or weird news. Nokia in a classic case of putting lipstick on a pig means its still a pig - they have literally released a nail polish in the pink color of the Lumia series. Yeah. After the smartphone is Osborned and dead, you now try to sell it to unsuspecting 'dumb blonde' type of women who would rather have their nail polish match their smartphone, than care that it signals they picked the wrong smartphone? I think this was a 'bold' idea that should have been killed before it got to the commercial stage, especially after Nokia heard that the whole Lumia series would be Osborned by Microsoft.

We hear that the US retail price of the Lumia 900 has been lowered again from 49 dollars to 19 dollars. AT&T who had been quoted being so excited about how supposedly well the Lumia initially was selling, has refused to give an actual Lumia series sales number - but were happy to report their iPhone sales number for Q2. That should tell us something.
(...)

Why is the Nokia market share crashing? I Told you, it is because of retail refusing to sell Nokia smartphones, ever since the Elop Effect. Global reaction against Nokia. And some of the regular readers of this blog continued to feud with me, even after Nokia CEO himself admits the retail problem. Do we need more evidence? Today Business Week reports that once again, this problem is real. A Manhattan AT&T store had no Lumia to even show a customer and never mentioned it as a choice. This, after AT&T had made the Lumia launch the biggest spending AT&T had ever used to promote a new phone model
(...)

In the firing department, Nokia shuts down the Qt development unit in Australia which signals that the whole Qt developer tools part of Nokia may be shut down. Again, this would be a competitive advantage for Nokia against all smartphone makers, and a strong 'ecosystem' component of a Nokia intent on winning in smartphones - but the only reason a Nokia CEO would shut down the Qt developer environment is that this is in Microsoft's best interest, not Nokia's. Remember, Nokia still in Q2 sold more Qt compatible smartphones (ie Symbian and MeeGo based) than all Lumia Windows smartphones, and Nokia's featurephones running S40 were supposed to be made compatible to Qt as well. Elop prefers to destroy and burn his platforms rather than pursue Nokia's best interests. (obligatory Anti-Elop comment here - Elop is the worst CEO of all time, has personally destroyed Nokia, and must be fired immediately)

Then to those burned platforms. Did you remember a platfrom called Symbian, which still in 2010 sold more than all iPhones and all Blackberries - combined? Which still today is bigger in global users than all iPhones and all Blackberries, combined? Which is second only to Android by installed base today? Which many call obsolete, yet delivered such a superphone that the world's biggest telecoms event, the Mobile World Congress just this Spring awarded Nokia the best phone of the event award to the 808 Pureview, a phone with such hot tech, that for example the latest edition of Windows Phone cannot even support the tech? That Symbian..

http://communities-dominate.blogs.co...ne-makers.html

Meanwhile Samsung is shipping phones with a TV tuner..

[Pedro]

Digia to acquire Qt from Nokia

Digia, the software powerhouse listed on the NASDAQ OMX Helsinki exchange (DIG1V), today announced that it has signed an agreement to acquire Qt software technologies and Qt business from Nokia. Following the acquisition Digia becomes responsible for all the Qt activities formerly carried out by Nokia. These include product development, as well as the commercial and open source licensing and service business. Following the acquisition, Digia plans to quickly enable Qt on Android, iOS and Windows 8 platforms.

http://digia.com/en/Home/Company/New...Qt-from-Nokia/
http://linux.slashdot.org/story/12/0...-qt-from-nokia

Recall that Digia had already bought Qt "commercial licensing and services business" from Nokia. It was also post Microsoft deal to ship Windows phones.

[Pedro]

Vringo and Nokia Execute Patent Purchase Agreement

Patent Purchase Agreement with Nokia Corporation pursuant to which Nokia agreed to sell Vringo a portfolio consisting of over 500 patents and patent applications worldwide, including 109 issued United States patents.

(...)

Thirty one of the 124 patent families acquired have been declared essential by Nokia to wireless communications standards. Standards represented in the portfolio are commonly known as 2G, 2.5G, 3G and 4G and related technologies and include GSM, WCDMA, T63, T64, DECT, IETF, LTE, SAE, and OMA.

http://www.businesswire.com/news/hom...hase-Agreement

The desert, a corpse, vultures flying in circles.

[Pedro]

When 2 plus 2 equals less than 2. Thats right, not less than 4, I meant less than 2. The Microsoft Point of View to the Nokia dead-end

This blog is not about Nokia's record-setting failure in smartphones. I have written enough about why I evaluate Nokia CEO Stephen Elop as the worst CEO of all time. If you want the first 19 reasons, they are here. The 20th reason is here, and the 21st reason is here. I am not alone in calling Elop incompetent and one of the worst managers alive, or even possibly the worst CEO of all time. This blog is not about the Nokia point-of-view. This is now the calculation from Microsoft's angle. How did it turn out for them. The Nokia partnership was the most certain slam-dunk gambit that could not fail, no matter how badly it might be botched, this was so pure gravy for Microsoft, they would always end up roses in the end. The scheme that could not fail. Like Baldrich would say on The Black Adder, I have a cunning plan...

The circle on the left reflects the situation in Q4 of 2010, the circle on the right, the situation now in Q2 of 2012. What the hell happened here? This was not supposed to be possible. 2 plus 2 equals less than 2. Quite literally, Microsoft's own market share - the red part - is now SMALLER than it was before this partnership started. This after 9 months from the first Nokia phones running Windows. This while Nokia has already migrated 40% of its total smartphone production to Windows. Out of the 25% of market share that Nokia has so far attempted to convert to Windows Phone, Nokia was not able to convert all, nor most, or half; or even the catastrophic one quarter. No, Nokia has lost 7 out of every 8 customers it tried to convert from 'obsolete' and 'undesirable' and 'outdated' Symbian before this partnership to the new and better user-friendly Windows Phone today. Nokia traded 25 market share points in Symbian in Q4 of 2010 for under 3% market share on Windows Phone today. Yes. This 'partnership' has been able to convert only one out of every 8 loyal Nokia owners. Seven out of those eight went to the competition, primarily to Google's Android, Apple's iPhone and Samsung's bada.

http://communities-dominate.blogs.co...oft-point.html

Note: I'm skipping a few posts.

[Pedro]

Open Letter to Nokia Shareholders

I just learned a few hours ago, via Kauppalehti in Finland, that there is now a buzz around the Finnish shareholders association, to consider getting signatures to get Elop fired (special shareholders meeting and all that). I had not in any way thought about writing any Nokiastuff today, but just reading some of the discussion at Kauppalehti's forum had me instantly motivated, that I should say something. Not to my regular readers who on this blog know my views very well - I was one of the first to demand Elop be fired, that is no surprise. But the honest discussion and debate that the Kauppalehti forum had in Finnish, among shareholders, with legitimate concerns. Is this Elop's fault, would removing him resolve anything, etc. So I instantly dived into writing from my heart to Finnish Nokia shareholders, in Finnish, why I think yes, Elop should be fired and why it actually could result in reasonably rapid improvement in Nokia's predicament.

http://communities-dominate.blogs.co...reholders.html

[Cudni]

Thanks for all the updates. I'm sure anybody interested in the topic can follow it at the source.